Since Dotcom was arrested in January 2012, he has successfully resisted extradition to the United States and remains in New Zealand free on bail.

While Dotcom and his attorneys challenged the asset seizure, the 4th US Circuit Court of Appeals ruled in August 2016 that because Dotcom has never come to the United States to face the criminal charges against him or challenge the seizure, "fugitive disentitlement" applies. This is the legal theory positing that when a defendant has fled the country to evade prosecution—or when the person never appeared before an American court—he or she cannot make a claim to the assets that the government wants to seize under civil forfeiture.

Further Reading

"Because the statute must apply to people with no reason to come to the United States other than to face charges, a 'sole' or 'principal' purpose test cannot stand," the 4th Circuit concluded. "The principal reason such a person remains outside the United States will typically be that they live elsewhere. A criminal indictment gives such a person a reason to make the journey, and the statute is aimed at those who resist nevertheless."

However, as the Dotcom legal team argued unsuccessfully both before the 4th Circuit and in its petition to the Supreme Court, American law can’t use its authority to seize assets abroad. Plus, the Dotcom team claims, Dotcom can't be considered a fugitive if he has never set foot in the United States.

"We are disappointed in the denial of the cert petition—it is a bad day for due process and international treaties," Ira Rothken, Dotcom’s chief global counsel, told Ars.

"Kim Dotcom has never been to the United States, is presumed innocent, and is lawfully opposing extradition under the United States-New Zealand Treaty—yet the United States by merely labeling him as a fugitive gets a judgement to take all of his assets with no due process," Rothken said. "The New Zealand and Hong Kong courts, who have authority over the assets, will now need to weigh in on this issue and we are cautiously optimistic that they will take a dim view of the Fugitive Disentitlement Doctrine and oppose US efforts to seize such assets."

Last month, the High Court of New Zealand, the country’s intermediate appellate court, ruled that the entire government spying operation conducted against two of Kim Dotcom’s closest colleagues was not authorized under local law in 2011. That could jeopardize the country's efforts to extradite the two men.

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Cyrus Farivar
Cyrus is a Senior Tech Policy Reporter at Ars Technica, and is also a radio producer and author. His latest book, Habeas Data, about the legal cases over the last 50 years that have had an outsized impact on surveillance and privacy law in America, is out now from Melville House. He is based in Oakland, California. Emailcyrus.farivar@arstechnica.com//Twitter@cfarivar